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Yuriko Nakao | Getty Images News | Getty Images
Bitcoin is back. On Thursday, the cryptocurrency hit a new high, surpassing the $ 48,000 level, according to data from CoinDesk.
Even though the asset has been very volatile, those who have held it for the long term have reaped incredible gains.
For example, if you invested in bitcoin when it was first launched in 2009, your returns could be infinite because the initial value of the asset was $ 0.
“Theoretically, you could have gotten unlimited bitcoin, then infinity dollars,” said Daniel Polotsky, CEO of CoinFlip, one of the largest Bitcoin ATM companies in the United States.
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“It is certainly the best performing asset of the last decade,” he said.
If you buy bitcoin a bit later and hold the asset through the ups and downs, you will still get remarkable returns from your initial investment.
Millions of wins
Let’s say you entered the game when a bitcoin was 10 cents, around October 2010. If you had invested $ 100, you could have bought around 1000 Bitcoin.
At their highest level on Thursday, those 1000 Bitcoin would have been worth over $ 48 million, regardless of the makeup and assuming you bought and held the asset the entire time.
To be sure, it takes a long time to own a very volatile asset, which means that the group of people who both invested in bitcoin so early and largely held onto their investments is small, Polotsky said.
And, while there are many stories of extreme gains from those who invested in cryptocurrency, there are also many who lost so much money by buying and selling the jerky asset at the wrong time.
Additionally, investors who have held Bitcoin for so long have struggled to cash in their incredible gains due to technical issues – some have forgotten their digital wallet passwords meaning they only have a few attempts to access funds before being locked out. forever.
Yet bitcoin has followed an incredible trajectory that has overtaken other investments. So far, in 2021 alone, the cryptocurrency has jumped over 63%, after quadrupling in value in 2020.
What motivates these returns
More recently, the price of bitcoin has been driven by high level support. Bank of New York Mellon said on Thursday that it will provide custody services for digital assets, citing growing customer demand.
Earlier in the week, Mastercard also announced that it will start offering support for cryptocurrencies on its network this year. And, on Monday, Tesla announced that it had purchased $ 1.5 billion worth of bitcoin and would soon start accepting the currency as a form of payment.
And, while the cryptocurrency has also shown its mark volatility in recent weeks, longtime bitcoin bulls are seeing even more returns in the asset’s future.
Mike Novogratz, CEO of Galaxy Digital and a known cryptocurrency bull, said in November that he saw bitcoin jump to $ 55,000 or $ 60,000 by the end of 2021 as it continued to replace gold. Tyler Winklevoss, another Bitcoin bull and co-founder of the Gemini crypto exchange, said he could see the asset reach $ 500,000 per coin one day.
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Disclosure: NBCUniversal and Comcast Ventures Invest in Tassels.
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